Thomas J. Mitchell and Janice M. Mitchell - Page 6

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            exception that is not pertinent here, the accuracy-related                                 
            penalty under section 6662(a) is inapplicable “with respect to                             
            any portion of an underpayment if it is shown that there was a                             
            reasonable cause for such portion and that the taxpayer acted in                           
            good faith with respect to such portion.”  Sec. 6664(c)(1); see                            
            also sec. 6664(c)(2).  Respondent’s position as to the accuracy-                           
            related penalties was unreasonable in both fact and law.                                   
                  We turn to apportion petitioner’s litigation costs to the                            
            accuracy-related penalties issue.  Respondent does not contest                             
            the reasonableness of petitioners’ costs for the entire                                    
            litigation, and neither do we.  We do not believe, however, that                           
            many of those costs are attributable to petitioners’ defense of                            
            respondent’s determination of the accuracy-related penalties.                              
            Petitioners’ itemized statement of litigation costs does not set                           
            forth with any specificity the amount of those costs that is                               
            attributable to the accuracy-related penalties issue; thus, we                             
            proceed to determine that apportioned amount on the basis of the                           
            record.  See Ragan v. Commissioner, 135 F.3d 329, 335 (5th Cir.                            
            1998), affg. T.C. Memo. 1995-184, and the cases cited therein;                             
            see also Dixon v. Commissioner, T.C. Memo. 2000-116; Lozon v.                              
            Commissioner, T.C. Memo. 1997-537.                                                         
                  Petitioners devoted little time at trial to the accuracy-                            
            related penalties issue, and they spent even less time on that                             
            issue on brief.  They did, however, devote much of the instant                             

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